Annual Roundtable

What's On Your Radar?

COVID-19 continues to dominate the headlines as it wreaks healthcare havoc, but there are 8 strategic trends poised to impact your business in the coming weeks and months. Are you monitoring them? Are you prepared?

radar screen

Photo © Makhnach/

Each year, HMEB surveys several members of its editorial advisory board to learn about the top-priority trends, strategic considerations, and healthcare issues facing providers. Obviously, the overriding trend continues to be the COVID-19 public health emergency, with the Delta variant ensuring that U.S. healthcare will be dealing with the coronavirus for months.

However, providers must know about eight other trends they must integrate into their business planning and management. So, while the PHE might continue to dominate healthcare headlines, let’s examine these eight critical HME trends:


In September, a collection of HME industry entities formed DMEscripts LLC, a healthcare technology e-prescribing company that provides a platform for prescribers to electronically transmit HME/DME orders to any participating provider. The DMEscripts alliance includes the American Association for Homecare, VGM & Associates, AdaptHealth LLC, Apria Healthcare Group LLC, Lincare Inc. and Rotech Healthcare Inc.

DMEscripts will utilize proprietary e-prescription software to operate an open network so any HME provider can enroll in the network at no cost to prescribers or patients. The fee for the services will be on a transaction fee basis (that is considerably lower than the cost to process orders manually, AAHomecare’s Ryan notes).

For Ryan, this represents a crucial opportunity to accelerate the widespread adoption of an electronic ordering application for DME and improve care, access and business performance as a result. The current, time- and money-consuming fax ordering process will be a thing of the past if DMEscripts achieves its vision.

“I am bullish on the DME Industry and am very excited about the opportunity we have to drive large-scale adoption of e-prescribe in the industry,” he says. “The goal is to drastically improve the current order to delivery process. The industry now has a solution and an opportunity to accelerate widespread adoption of an electronic ordering application for DME.”

On the patient and referral partner side of the scenario, e-prescribing will improve the patient and referral experience, reducing the time required to refer a patient and allow DME suppliers to reduce administrative costs, Ryan adds.

“Widespread adoption of digital communications is transforming the healthcare industry — and the DME community needs to make sure we’re taking full advantage of these technologies,” Ryan notes.


The industry is currently operating under higher reimbursement from the CARES Act, which will last as long as the COVID-19 public health emergency, which could last into 2022. However, Bachenheimer warns there is one reimbursement-related ball in the air that providers must continue to keep their eyes on over the next several months: CMS’s DMEPOS Payment Rule.

Released in November 2020, that proposed rule included a number of top-level reimbursement items. Notably, it continued current relief for rural HME suppliers via the 50/50 blended rate. Other non-bid area suppliers would be paid at 100 percent of the adjusted fee schedule. It also made changes related to the HCPCS Level II Code Application Process. It also included changes to the process for making Benefit Category Determinations and Payment Determinations for DME and other Items and services under Part B.

The industry “has waited with bated breath to see what the Biden administration would do with these proposals,” Bachenheimer explains, but two things have delayed progress: “The first is, when the Biden administration came in January, it put a halt on all regulatory initiatives because they wanted to because they wanted to review everything that was in process during the previous administration,” Bachenheimer says. “The second is the Biden administration took a long time to get its CMS Administrator approved through the Senate.”

For now, it’s a waiting game, she advises: “[CMS] could start from scratch, they could revise it, they could finalize it as it was proposed, and we really don’t have an indication at this point what it will be. … The rule could be substantially the same or substantially different. We just don’t know.”


The Backlog of audit cases at the Administrative Law Judge level is almost resolved, but audit expert van Halem asks, is that actually good or bad for suppliers?

We certainly know that the previous situation at CMS’s Office of Medicare Hearings and Appeals (OMHA) was almost Kafkaesque.

“A backlog that grew at its peak to nearly $1 million claims – a majority of which at one point (54 percent) were related to durable medical equipment claims,” van Halem explains. Despite the 90 days mandated by federal law, hearings were not occurring for over 1,000 days in many cases. ”

However, OMHA’s implementation of some strategies for attacking the caseload as well as the QIC Telephone discussion pilot as well as the Settlement Conference program resulted in a significant decline in cases pending, he notes.

“Most recent data released by OMHA showed about 85,000 DMEPOS appeals still pending,” van Halem says.

News like that should make providers want to do a jig, but van Halem warns they should hold off on strapping on their dancing shoes.

“The onslaught of the RAC auditors back in 2011 to 2015 is what led to the ALJ backlog,” he explains. “To reduce the number of claims getting into the Medicare appeal system, CMS began limiting RACs significantly in the volume of claims they can review.

“However, OMHA has opened seven new offices around the country and hired 70 new judges,” van Halem continues. “They now have budget, staffing, and infrastructure to manage over 300,000 appeals annually.”

Currently, the RACs are not receiving anywhere near that volume due to the significant limitation CMS put on them, as well as the decline of audits during the PHE (which is starting to pick back up, van Halem notes).

“Our concern is once the backlog is fully resolved, CMS will loosen their restrictions on the RAC and we will begin seeing an increase in the volume of audits,” he says. “Suppliers should prepare for this. Now is the time to be proactive and look at your claims to avoid long-term issues and having to deal with RAC denials and appeals.”


As the delta variant of COVID-19 makes a greater and greater impact on American healthcare, post-acute care and HME providers are feeling crunches on the supply side and delivery side of the industry. Ackerman calls it a “perfect storm.”

Delivery times, particularly at skilled nursing facilities and hospitals, have sharply increased. Deliveries of items like walkers and wheelchairs that used to take 10 minutes now take 45 or 60 minutes due to procedures like clearing screenings and escorted walk-ins, which are not baked into the reimbursement.

“Drivers that could typically do 12 or 13 runs a day are being reduced to four or five,” he says.

Accompanying that, during 2020, the first year of COVID, manufacturers worked to help providers by holding back on price increases and extending terms. However, in 2021 manufacturers saw their supply costs go up and that in turn has hit providers. Plus, those manufacturers are experiencing supply constraints due to backed-up shipping containers with price tags escalating from $3,000 to $20,000, which has resulted in expanding ship times and costs. This time, vendors are forced to pass on price hikes Ackerman refers to as a “surcharge.”

“In theory, when the problem goes away, they take the surcharge away,” he says. “But I’ve been doing this for 40 years and surcharges are usually blended into price increases. We’re looking at a fairly permanent price increase.”

Lastly, when CMS didn’t bid Round 2021, it acknowledged that it had hit rock bottom with reimbursement.

“Instead of making an adjustment for that, or consulting with the industry, or at least being more transparent, they went ahead and froze the prices and opened the market up to any willing provider,” Ackerman explains. “So the market volume that used to ‘pad’ the lower prices was now gone. … it’s really becoming a crush.”

Can anything be done? CMS can increase reimbursement from their already too-low levels, Ackerman says, but that’s only a part of the fix.

“The government has to work very hard on getting that container cost down,” he explains. “There’s a log jam that needs to be administratively dealt with so that the free market can come back and take over.”

In the meantime, Ackerman advises providers to continue seeking efficiencies, innovating, finding niches and doing the sorts of things they’ve done to survive previous challenges.

“Demographics remain heavily in our favor for the next 20 years, and there’s a population that’s going to be needing our expertise,” he says. “Know that the leaders in the industry are aware of all this and working hard to deal with it.”


The COVID-19 public health emergency hasn’t just impacted the day-to-day lives of the chronic care patient populations that HME providers serve but also their healthcare.

“Certainly one of the things that has caused a disruption during the pandemic is their physical activity, or lack thereof, their sleep, their stress, and mental health, and of course, a big one is access — access to their medications, and access to normal health care visits,” Canally says.

Canally cites some statistics that bear this out: In June 2020, about 55 percent of adults living with multiple chronic conditions reported delays or avoidance of medical care. Also, 69 percent of patients with chronic conditions reported that COVID-19 affected their ability to manage their conditions. That’s not a small portion of the population. Six in 10 adults in the United States have at least one chronic disease, and the CDC says four in 10 have two or more.

How do providers handle this? By changing up their model for something that emphasizes service and care even more than they have in the past.

“I believe there needs to be an expansive model for their patients,” Canally says. “Let’s use diabetes as an example. … If you look at diabetes more as a hub-type model than just diabetic supplies, the first thing that comes to my mind is if you want to increase your number of referrals, going to the physician saying, we now can do these services for your diabetic patients.”

That means expanding their range of products and conducting more follow-up.

“Assessing patients’ needs goes hand-in-hand with including more virtual care, at-home prescription delivery, remote monitoring,” Canally explains. “There’s a lot of devices now in the HME industry that are directly related to remote monitoring. It’s all about expanding your model to add digital diagnostics with support, and certainly applications for education, behavior modification, and that social support. I believe that truly is going to be the future. And, as I always say, the future is here.”


Pivoting off of Canally’s point, new editorial advisory board member Nettleship (who replaces HMEB’s good friend Rob Boeye) emphasizes the fact that patient expectations are radically changing, as are their preferred methods for interacting with their healthcare providers — including HME businesses.

“Patient expectations have recently undergone a dramatic evolution, driven in part by the COVID-19 pandemic,” she says. “Patients today view their healthcare from a much more consumer-like mindset, expecting the same transparency and convenience they’ve become accustomed to in other areas of their lives.”

If providers want to remain patient-centric businesses, they must incorporate digital innovations and orchestrate what Nettleship calls the “digital patient experience.” And the word “orchestrate” is well chosen because how the provider manages that is as nuanced as the flicks of an orchestra conductor’s baton.

“Consumers today are conditioned to expect Amazon-like convenience and customer service,” she notes. “By introducing an integrated digital experience, providers can satisfy their patients’ expectations and help them better understand and manage their care in a way that makes sense to them, all while feeling supported by their provider.”

For starters, Nettleship advises that providers consider creating a “low-friction strategy” that opts for communications geared to prevent overwhelming patients. Once this process begins, providers can gradually introduce features to help patients manage their overall care, as well provide feedback.

“The most significant piece of this puzzle is making patients’ experiences as transparent, consistent and effortless as possible,” she says. “The best way to achieve this is to ensure patients can access the expanding digital ecosystem including care plans, prescriptions and billing information, among other important information related to their care. Enabling communication between patient and provider in which the patient feels cared for, while reducing the burden associated with that interaction drives to a better experience for both patients and staff.”


Retail sales have been the cornerstone strategy for helping providers deal with larger reimbursement and healthcare trends. Moreover, retail sales have become such a natural component of the HME industry that there are providers that are majority-retail or retail-only.

Poonawala’s a provider with a proven retail track record. For him, retail sits at the hub of healthcare innovation and patients’ need to improve their health, remain independent and stay in control of their care.

But there’s a fundamental problem in retail HME that must be addressed, he warns: pricing policies. Currently, brick-andmortar retail providers don’t have much protection with today’s vendor pricing policies, he contends.

Retail items have traditionally been priced by vendors using two different methods: manufacturer’s suggested retail price (MSRP) and minimum advertised price (MAP). MSRP represents the maximum a manufacturer wants an item to be priced. MAP represents the lowers price it wants to see an item priced.

Neither policy has done much to stem the trend of providers’ physical retail locations getting “showroomed.” That means a prospective buyer comes into the retail location, inspects the goods, ask staff questions, and then, instead of purchasing the item, leaves to find an online seller offering the same item for cheaper, Poonawala explains.

But a new pricing policy has developed in the retail world: unilateral pricing policy (UPP). UPP sets a hard-and-fast sales price the manufacturer sets for resellers. The price is the price.

“Why is a product permitted to be sold for cheaper online than in our retail store?” Poonawala asks “ The next iteration of the iPhone is the same price no matter where I buy it. I’m starting to move to brands where the price is the Apple concept.”

He’s calling on retail providers to tell their vendors to implement UPP. In fact, he argues that even if a MAP might be favorable, providers should still support vendors that offer UPP.

“If [vendors] start seeing that there are more providers publicly looking for UPP, and they’re the first ones to implement it — even over more premium brands — I’m going to start buying that product,” he says.


Regardless of all these trends, the overarching strategic priority for providers is to develop pathways to new business, and that means getting creative, according to Resnick. And if anything, providers still have the best asset in town: their patients.

“Money follows the person,” Resnick says, explaining that providers have followed referrals based on patients needing prescriptions based on traditional private insurance, Medicare, or disability prescriptions. What they haven’t done is pursue non-traditional sources of business such as the Veterans Administration. And that’s a missed opportunity, particularly in smaller markets where the VA is under-served. Providers’ excess inventory could become very profitable in such a scenario.

“It’s not easy getting a contract with the Federal government,” he says. “But once you get it? It’s stable revenue.”

Similarly, providers can also reach out to federal and state programs that provide special funding for patients in adult communities and residential group homes serving patients with disabilities and that might not have family support.

Also, get creative about driving retail engagement, he says.

“You’re only as good as the people who come into your store,” Resnick advises. ”Go into these assisted living centers, and speak with the physical therapy or recreation department. They all have vans, so have in-services on a variety of products, and they’ll bring in eight or 10 people.”

This article originally appeared in the Sep/Oct 2021 issue of HME Business.

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